Startup Centre-of- Excellence- YES BANK T-Hub Caselet

Impressive.. these guys can be rockstars, a thoroughly impressed Jay Krishnan emphatically
stated to the YES BANK team looking at the Startups working on their projects at CatalysTT-Hubs state of the art entrepreneurship infrastructure in Hyderabad.
The CEO of T-Hub, a unique ecosystem for technology startups, was a serial entrepreneur
himself therefore few countered his observation that the startups hard at work at a hackathon
being hosted at T-Hub were working towards something special, something ground-breaking.
Jay was speaking to the YES BANK team, led by their head of strategy & Innovations, on how
the two organizations could take their partnership to the next level.
YES BANK, Indias largest Greenfield bank and a startup success story had established
themselves as a pioneer in technology and innovation in the last 13 years. Their partnership
with T-Hub, was a step in the bank and its founders vision of creating an enabling
entrepreneurial ecosystem for financial technology startups around the country.
After flagging off their partnership with a MoU in April 2016, the two teams had assembled at
CatalysT- T-Hubs dedicated building for startups in Gachibowli, Hyderabad to
Brainstorm on the next steps in the partnership
Way forward in setting up the FINTECH ecosystem that they planned to create
Marketing strategy to popularize the planned ecosystem among startups and
techpreneurs in the country
I.

Indias Startup Revolution

It has been a frenetic decade for Indias startups from a fairytale for the few to everyday
success stories startups have been front and center in the Indian economy. Such has been the
pace of emergence of startups in the country, India today is amongst the top five countries in
the world in terms of number of startups the last 10 year have also seen more than 10 unicorns
or billion dollar startups emerge in India.
According to NASSCOM, India has moved to 3rd position in number of startups with the
fastest growing base of startups worldwide. While the United States stands head and shoulders
above all with 83,000 + startups, India with 66% of its population under the age of 35 and an
average age of 28 for entrepreneurs has the perfect demographic dividend to boost its

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momentum. NASSCOM predicts that the pace of startup launches will increase from 3-4 every
day in 2015 to 6-7 every day by 2020.
We are literally at the Gladwellian tipping point with growth, demographic dividend, capital,
acquisitions and above all entrepreneurial energy all converging. All key indicators point
towards an inflexion point opportunities in the domestic market, increased access to mentors,
greater M&A and consolidation clearly depicts the emergence of a new ecosystem. At this pace
by 2020 more than 11,500 startups are expected to be established in India creating employment
for more than 250,000 people.

Fig 1: Comparison of the Top 5 Startup Nations in the world- source KPMG Startup Systems

Fig 2: Startup Ecosystems globally source NASSCOM 10,000 startups

Overall, the Indian economy appears a thriving yet under-penetrated market driven, with a
huge scope for exponential growth. Increased penetration of internet, booming technology has
been at the core of driving businesses. India, especially with its renewed focus on ease of doing
business has seen huge interest from global investors and VCs despite lingering operational,
regulatory and taxation issues.

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II.

Government Support for Startups: Creating an Enabling Ecosystem

In August 2015, the Government of India created a unified policy framework to help India
leapfrog the USA as the number one startup destination. The campaign titled Startup India
aimed at helping startups with funding and other requisite support. Some of which included:
Loans under the scheme would be given for Greenfield projects in the non-farm sector
Intention of the scheme is to facilitate at least two such projects per bank branch
Ease out the existing regulatory regime for startups and is considering extending tax
incentives to them. The Department of Industrial Policy and Promotion (DIPP) is
currently working around a clear definition for startups to ensure that the regime is
available to businesses. The scheme is expected to benefit at least 250,000 borrowers in
36 months from the launch of the Scheme.
Hold one fest at the national level annually to enable all the stakeholders of Startup
ecosystem to come together on one platform.
Hold one fest at the international level annually in an international city known for its
Startup ecosystem.
The fests shall have activities such as sessions to connect with investors, mentors,
incubators and Startups, showcasing innovations, exhibitions and product launches,
pitches by Startups, mentoring sessions, curated Startup walks, talks by disruptive
innovators, competitions such as Hackathon, Makerspace, etc., announcements of
rewards and recognitions, panels and conferences with industry leaders, etc.
III.

Innovation Centers at National Institutes: Using Established Frameworks to Boost

the Ecosystem

Research & Development lie at the core of the creation of any entrepreneurial system and in
order to augment R&D efforts the Government has proposed to set up/scale up 31 centres (to
provide facilities for over 1,200 new Startups) of innovation and entrepreneurship at national
institutes, including:
Setting-up 13 Startup centers: Annual funding support of INR 50 lakhs (shared 50:50 by
DST and MHRD) shall be provided for three years for encouraging student driven
Startups from the host institute.
Setting-up/ Scaling-up 18 Technology Business Incubators (TBIs) at NITs/IITs/IIMs etc.
as per funding model of DST with MHRD providing smooth approvals for TBI to have
separate society and built up space.

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Fig 3: Startups Centers & Technology Business Incubators

IV.

Incubators, Accelerators Vital Cogs to Sustain Indias Startup Ecosystem

In addition to enabling regulations and growing access to funding, the emergence of numerous
incubators and accelerators has been key to the burgeoning entrepreneurial activity in India.
While these terms have been used somewhat interchangeably, accelerators as the name suggests
help increase the speed of business of an idea- shape a ready product concept and make it
business ready. Incubators on the other hand nurture early ideas, facilitate prototype creations.
Globally, the lines are somewhat blurring with the focus on creating comprehensive
ecosystems combining the ethos of incubators and accelerator.
Exhibit 5 highlights the working of an accelerator, taking you through the typical cycle of YCombinator an American seed Accelerator which will help in understanding the phases of a
typical acceleration journey
V.

YES BANK: Indias First Greenfield Startup Bank

YES BANK was founded in 2004 on the ethos of Professional Entrepreneurship and a
differentiated approach of Knowledge Banking to provide comprehensive sector specific and
customized financial solutions to sunrise sectors of the economy. Characterized since its early
days by contagious positive energy and swift decision making, especially in adversity YES
BANK stood out due to its consistency in delivering to shareholders stakeholders, customers
and employees alike. Influence in large by its Founder, Managing Director & CEO Mr. Rana
Kapoor, the bank has consistently reached new heights in its drive to emerge as the Finest
Quality Bank of the World In India. At the core has been Mr. Kapoors mantra of visualize,
strategize and actualize which has seen it emerge as one of the countrys startup success stories
The 1st phase of YES BANKs lifecycle from 2004-2010 was characterized by entrepreneurship
and involved building strong capabilities in the wholesale banking segment with a
comprehensive product suite, which leveraged the Knowledge Banking approach while
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building a strong human capital team on the Owner-Manager-Partner philosophy. By 2010,

YES BANK was recognized as one of Indias fastest growing banks in the previous 5 years and
emerged as the Largest Small Bank in our country, India. From 2010-2015, YES BANK lived
the Version 2.0 phase during which the focus was on expanding the Retail Banking capabilities
by drawing upon the Wholesale Banking franchise through a B2B2C approach for client
acquisition and business generation . While the previous version was about entrepreneurship,
in Version 2.0, YES BANK focused on further institutionalizing its systems, processes and
controls gearing itself for orbit shifting expansion. The Bank built a strong platform in terms of
its Brand, Distribution via Branch and ATM footprint, Technology, Human Capital as well as
Risk Management. This well calibrated growth strategy resulted in YES BANK establishing
itself as the Largest Medium Sized Bank in the country with a balance sheet size of over `
100,000 Crore. FY 2015-16, marked the 1st year of the next phase of YES BANKs growth cycle of
2015 to 2020. The vision for YES BANK is to establish itself as a meaningful LARGE HIGH
QUALITY Bank by employing a focused 2-pronged strategy of Deepening Mind Share and
Growing Market Share
VI.

T-Hub Bringing Global Entrepreneurial Excellence to India

T-Hub is a unique public/private partnership between the government of Telangana, 3 of

Indias premier academic institutes (IIIT-H, ISB & NALSAR) and key private sector leaders. It
stands at the intersection of the start-up, academic, corporate, research and government
sectors. Founding Partners:
Indian School of Business
NALSAR -(National Academy of Legal Studies and Research
IIIT Hyderabad - The International Institute of Information Technology, Hyderabad (IIIT
Hyderabad)
Government of Telangana
A. Vision
T-Hub is designed for technology-related start-ups, and its mission is to catalyse the
creation of one of the tightest and most vibrant entrepreneur communities in the world
in order to encourage and fuel more start-up success stories in India. We will do this in
the following ways:
Attract the best start-ups and entrepreneur organizations from across the world to
Hyderabad.
Work with an extensive network of partners to help entrepreneurs launch and scale
innovative companies.
Equip innovators and organizations alike with the entrepreneurship skills required to
succeed, using methodologies that transcend traditional learning.

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 Link, educate and promote all entrepreneurship-related stakeholders in Hyderabad and

Telangana, including start-ups, investors, incubators and accelerators, research centers,
startup resources etc. in order to facilitate faster connections between talent, ideas and
capital.

Figure 5: T-Hub Model for Startups

VII.

YES BANK T-Hub Centre of Excellence

In April 2016, YES BANK, inked a Memorandum of Understanding (MoU) with T-Hub to create
a Centre of Excellence, to enable the Indian startups across segments; with primary focus
towards Financial Technology (FinTech) space.
As per the agreement, YES BANK and T-Hub would be setting up a World Class Centre of
Excellence (CoE) for FinTech startups at T-Hub. This association will help create a conducive
business environment and support system for a large number of FinTech startups. In addition,
YES BANK will offer its various products and payment gateways and open APIs to the startup
community. Apart from FinTech, YES BANK will also work closely with startups in segments
such as Agri-Tech, Healthcare, e-Commerce, loT etc.
A. KEY HIGHLIGHTS OF THE PROGRAM
Will provide an open environment for startups to innovate.
Will allow to build on its APIs to conduct internal tests to the startups to commence
operations effortlessly
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 Will ensure the project complies with applicable banking laws, rules and regulations
KYC, AML/PML
Will offer its various products, payment gateways and other business enablers ; as
relevant; to assist the on-boarded startups to commence operations easily
Will offer quick proof of concept option to the on-boarded startups to prove their
business and technology models.
Will provide investment banking advisory support to startups who wish to raise money
and scale their business
Will work with corporates/partners including Govt. in this space to create impact in its
sector.
Will explore partnership with a private or govt. entity based on common goals, synergy
and which helps in furthering the innovation quotient under the Centre of Excellence
B. Brainstorming Center @ CatalysT T-Hub
The T-Hub CEO, board of directors and the YES BANK team were deep in discussion now,
brainstorming on the future roadmap. Ideas were being tossed around in the room, with some
of the opinion that the initial focus should be on creating Advisory Council a group of
mentors experts to guide the startups which were inducted in the CoE, while some felt the
process of identifying the correct startups should take precedence.
They finally decided to create a joint crack team which had been entrusted with
1. Innovation Strategy to leverage the relationship between YES Bank & T-Hub and to
create a holistic innovation program (innovation lab+ incubator + accelerator +
showcase)
a. Highlight phase wise the steps to be taken by the CoE, including
i. Process for identifying the startups to be inducted in the startup
ii. Map for the kind of support to be provided to theses startups in the
incubator & accelerator
iii. Ways in which the business ready startups could be utilized by
YES BANK/T-Hub or showcased to relevant stakeholders
iv. Collaborations with other technology leaders, incubators etc. to
accentuate the program
v. Proposed mentors for the Advisory Council of the CoE
b. Budgets in each phase and expected outcomes
2. Detailed Marketing Strategy and implementation program to promote the CoE initiative
in a cluttered an disorganized market
a. The strategy would be for the period of April 2017 March 2018 and should have
a defined budget
b. Should focus clearly on the target audience of startups. Entrepreneurs and other
key stakeholders in the startup ecosystem
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3. How YES BANK could use T-Hubs other FINTECH CoE programs for its startup
strategy
As a member of the crack team you have to share with the YES BANK and T-Hub board a
vision document. The document has to be in word/pdf within 1000 words (excluding exhibits
and excel sheets) in Book Antiqua font 11.

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Exhibit 1 Mapping Indias Startup Boom: Source NASSCOM

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Exhibit 2: Global Startup System Rankings: Source NASSCOM

Exhibit 3: Mapping Indias Startups: Source NASSCOM

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Exhibit 4: Incubators and Accelerators in India: Source Zinnov Research

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Exhibit 5: Y-Combinator: Source Y-Combinator Website

Y Combinator provides seed funding for startups. Seed funding is the earliest stage of venture
funding. It pays your expenses while youre getting started. Some companies may need no
more than seed funding. Others will go through several rounds.
At YC there are four different stages:
1. Idea
2. Building the first version of the product
3. Getting users, feedback, and traction (validation that people really want what youre
building)
4. Demo day (presenting in front of investors and press to raise your seed round and get
publicity)
Y Combinators goal is to get people through the first phase to the point where startups built
something impressive enough to raise money on a larger scale. Then Y Combinator introduces
entrepreneurs to later stage investorsor occasionally even acquirers.
What happens at Y Combinator?
At YC the team works with entrepreneurs on their ideas converting ideas into making things
people want. They usually identify the direction in which a small idea should be expanded, or
the point at which to begin attacking a large but vague one and make it more descriptive.
Secondly, they help founders deal with investors and acquirers
- Make introductions
- Teaching founders how to pitch startups to investors and how to close the deal
- Not only advise but protect interest of founders
- Jointly create a business ready product/service
FORMAT
Y Combinator has a novel approach to seed funding: they fund startups in batches. There are
two each year, one from January through March and one from June through August. During
each cycle they fund multiple startups.
Applicants fill out a form with their idea followed by an interview to select them for the
program. Most of the founders in each startup they fund (and always the CEO) are expected to
move to the Bay Area for the duration of the three month cycle. During those three months they
host a dinner once a week at Y Combinator, and at each dinner they invite an expert in some
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aspect of startups to speak. Typically speakers include startup founders, venture capitalists,
journalists and executives from well-known technology companies.
About ten weeks in, a Demo Day is hosted where all the startups can present their products and
services to a specially selected audience. Ten weeks turns out to be enough for most groups to
create a convincing prototype.

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